At an exclusive event in Singapore today a distinguished panel including Rosaline Koo from CXA, Shirley Wong from TNF Ventures, Alex Campbell from XERO, Chris Mazza from ClearMetal, Ted Tschang from Singapore Management University and I discussed the emergence of the Singaporean Technology Industry which is rapidly becoming a key driver for the country and the region.
Here are some highlights from the discussion.
The history of technology repeatedly demonstrates that creation wins. Every product or service we love exists because a legendary entrepreneur (and their investors) had an insight into an unsolved problem or market missing. And he or she didn’t sleep until they solved that problem.
These entrepreneurs figured out a way to solve that problem and along the way they created an insanely great product, a legendary company and a killer category that changed the world.
CLONES, ADAPTION & OEM KINGS
Singapore and much of the South East Asia region has historically been focused on manufacturing across electronic components and assembly, foodstuffs, textiles, and a services hub for International tech companies. Further north, Taiwanese, Korean and Chinese companies have focused the cloning and adaption of technology from the West for their local markets. Many of the great technology companies from this region have played a vital role as an Original Equipment Manufacturer (OEM). These entrepreneurs focused on refining technology creating comparable technology at a lower price.
REGIONAL CATEGORY KINGS
As the world shifted from hardware to the cloud, this region had to change. Category Kings from other parts of the world began delivering cloud based applications and platforms to enterprises and consumers in this region at very competitive price points. This, coupled with rapid innovation and agile development and a new breed of DevOps and cloud based deployment meant the OEM and services hub strategies became outdated.
Enter a new breed of Entrepreneur from Singapore and the region.
If you look at the value creation by tech companies in Singapore over the past decade you find a landscape dominated by a number of regional category kings.
These Entrepreneurs realized that simply cloning a technology was only part of the answer. That delivering service and support was different in this new word. They understood that they needed to design new categories, often by expanding and deepening their solution.
As an example, GRAB took the category of transportation on demand and expanded it to deliver this service on motorcycles. They also modified their solution by delivering a masking of the customer’s calling number and allowing them to select special types of transportation depeninding on religion or culture.
Another great example is Go-Jek in Indonesia. They went well beyond GRAB and are providing a delivery service for all kinds of products and services and they had to create a whole new cash based payments platform.
Garena is Singapore based and started in game distribution but now has payment network Airpay, and mobile-centric online marketplace Shopee. Garena+ enables online gaming but also meeting and chatting with other players. They are creating a frictionless community across online gaming, shopping, and payments.
In this way these companies solved their customers problem in a different way. And by re-defining the category and its blueprint, they are making it difficult for the global category kings to get a foothold in their region.
This regional category strategy is taking off and its working. Companies such as PropertyGuru, Lazarda, Grab and Garena have created almost $10 billion in market cap (See graphic 1) for the Singapore market. It’s impressive.
Graphic 1. Singapore Regional Kings.
We salute these legendary entrepreneurs and the Investors who funded them. Without their driving passion, the foundations for the Singaporean tech industry wouldn’t be so strong.
SINGAPOREAN ECOSYSTEM & VENTURE CAPITALISTS EMERGE
Underlying this success is a growing and vibrant ecosystem. Entrepreneurs who had experience in the Services Hub and OEM worlds, young entrepreneurs born of mobile and the cloud and Investors who understand the way to architect and grow regional category kings.
This ecosystem understands timing, how to re-define the category blueprint and how to build a thriving category ecosystem leveraging local relationships. It’s a powerful formula and its working.
As a result, leading VCs are able to raise significant funds and make more than $2 billion in investments in this new breed of startup (See graphic 2).
Graphic 2: Investments in Singaporean tech companies
Interestingly, much of the investment over the past few years has been provided as seed financing. Exceptional companies include CXA who is re-defining healthcare, SmartKarma building a collaborative marketplace for Asian investment research and analysis, and Carousell with its C2C marketplace for new and secondhand goods. (See graphic 3).
Graphic 3: Investments in Singaporean tech companies
We believe a number of these emerging Reginal Category Kings will emerge from this cohort of entrepreneurs which bodes well for the region and their investors.
CATEGORY DESIGN AND REGIONAL KINGS
Like their counterparts in Silicon Valley these entrepreneurs have to master product design, agile development and DevOps. They have to become legendary at Experience Design and Company Design. But as regional pioneers they also need to learn this new discipline of Category Design.
Category Design is the discipline of creating, developing and ultimately dominating a technology category. Some of the greatest entrepreneurs of our time have used it to create categories from Frozen Food to Social Networks to Energy Shots to Customer Relationship Management. They spend as much time evangelizing the problem as they do explaining the ramifications of the problem, a vision for the future and the outcomes their users and customers can expect. they become the thought leader and the 'face" of the category. Think Benioff with the Cloud, Bezos with online retail, Zuck with Social Networks and more recently Communication.
It is indeed an exciting time in the Singaporean Technology Industry and Play Bigger and Out Position are delighted to be part of it.
If you are interested in learning more about Category Design you can read our book "Play Bigger: How pirates, dreamers and innovators create and dominate markets" available at these leading book retailers: